401(k) Calculator

The 401(k) is the single most powerful retirement savings vehicle available to most American workers. For 2025, you can contribute up to $23,500 in employee deferrals ($31,000 if you are 50 or older with catch-up contributions). When you factor in employer matching contributions, the combined limit rises to $70,000. These tax-advantaged contribution limits, combined with decades of compound growth, make the 401(k) the cornerstone of most retirement plans. Contributing enough to capture your full employer match should be your first financial priority after building a basic emergency fund.

Employer Match Strategies

The most common employer match formula is 50% of employee contributions up to 6% of salary, effectively giving you an extra 3% of your salary for free. Some employers offer dollar-for-dollar matching or tiered structures. To maximize this benefit, ensure your contribution percentage meets or exceeds your employer's matching threshold every pay period. If your employer offers a true-up provision, you have more flexibility in contribution timing. If not, front-loading contributions early in the year could cause you to miss matching funds in later months if you hit the annual limit too early.

Investment Allocation by Age

A common rule of thumb is to subtract your age from 110 to determine your stock allocation percentage. A 30-year-old might hold 80% stocks and 20% bonds, while a 60-year-old might shift to 50/50. Target-date funds automate this transition and are an excellent choice if you prefer a hands-off approach. Regardless of your strategy, avoid holding too much of your 401(k) in your own company's stock — diversification protects you if your employer faces financial difficulty. Review and rebalance your allocation at least once a year to stay on track with your risk tolerance and retirement timeline.